Business interruption is big unknown for insurers, says Bank of England

LONDON, July 8 (Reuters) - Potential claims by companies for business interruption remain the insurance industry’s biggest uncertainty ahead of a court ruling, the Bank of England said on Wednesday.

Anna Sweeney, the BoE’s executive director for insurance, said the sector has remained robust in the face of the COVID-19 pandemic’s impact on assets they hold and on liabilities.

“The highest level of uncertainty remains around business interruption,” she told a City & Financial online event.

Britain’s Financial Conduct Authority will go to court this month to clarify whether an array of wordings in business interruption insurance policies back claims from policyholders asking for compensation due to pandemic lockdowns.

“A number of insurers are taking steps to make sure there is no ambiguity about who is and isn’t covered for a second wave,” Sweeney said.

Reporting by Huw Jones and Carolyn Cohn